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Sunoco Logistics Mariner Systems & Marcus Hook Industrial Complex June 2016

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Page 1: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

Sunoco Logistics Mariner Systems & Marcus Hook Industrial Complex June 2016

Page 2: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

Forward-Looking Statements Statements we make that are not historical facts are forward-looking statements. These forward-looking statements are not guarantees of future performance. Although we believe the assumptions underlying these statements are reasonable, investors are cautioned that such forward-looking statements involve risks and uncertainties that may affect our business and cause actual results to differ materially from those discussed in this presentation. Such risks and uncertainties include economic, business, competitive and/or regulatory factors affecting our business, as well as uncertainties related to the outcomes of pending or future litigation. Sunoco Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ended December 31, 2015 cautionary language identifying important factors (though not necessarily all such factors) that could cause future outcomes to differ materially from those set forth in the forward-looking statements. For more information about these factors, see our SEC filings, available on our website at www.sunocologistics.com. We expressly disclaim any obligation to update or alter these forward-looking statements, whether as a result of new information, future events or otherwise.

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Page 3: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

NGL Markets 2016 - 2021

Source: RBN Energy LLC

Page 4: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

Mariner Systems & Marcus Hook Industrial Complex

EVERYBODY MAKES THE SAME STUFF… – NGL’s, Petroleum Products, Olefins and Polyolefins are all

manufactured to similar specifications. IT’S ALL ABOUT THE LOGISTICS.

BRINGING PRODUCTION TO MARKET COMPETIVELY IS THE

KEY SXL’s MARINER PIPELINES AND MARCUS HOOK INDUSTRIAL

COMPLEX PROVIDE A COMPETITVE SOLUTION.

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Page 5: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

Mariner Franchise: 4 Successful Open Seasons

Mariner West Ethane from Houston to Sarnia

50,000 Bbl./day ethane

Mariner South Propane / Butane from Mont Belvieu to Nederland

120,000 Bbl./day capacity propane & butane

Mariner East 1 Ethane / Propane from Houston to Marcus Hook

72,000 Bbl./day ethane propane mix

Mariner East 2 NGLs from Shales to Marcus Hook 275,000 Bbl./day propane & butane

Page 6: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

Mariner East 1 & 2

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Connecting to 4 Fractionator Origin Locations in the Basin

275,000 B/D Initial Capacity 345,000 B/D including ME 1

World-Class NGL Facility at Marcus Hook Industrial Complex

Page 7: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

Mariner East 2 Ethane Expansion

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Mariner East 2 Ethane Expansion: Inititialy use existing 12” ME1 line from Houston to Delmont Build new 16” line from Delmont to Montello Use existing infrastructure from Montello to MHIC

Page 8: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

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Mariner East Overview

$ 3 Billion project in Pennsylvania The takeaway solution for the Marcellus / Utica liquids Most efficient export and processing option for one of the most reliable

and abundant NGL resource play in the US

Connected to a World-Class Northeast NGL Hub and Chemical Processing facility at Marcus Hook Industrial Complex (former Sunoco Refinery).

Repurposed as an NGL hub to receive Marcellus/Utica shale natural gas liquids (NGLs) for distribution and further processing to access international, local and regional markets. Phased approach: Mariner East is scalable

– Project will be expanded as production/ consumption needs grow – Combined ME1, ME2 and ME2X = 745 MBbl./day and scalable.

Page 9: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

Marcus Hook Industrial Complex 800 acre facility: Former Sunoco Refinery 5 Million Bbls/ NGL storage at ME2 completion, in addition to

underground granite caverns ~2MM Bbl. capacity. 5 MMBBL of aboveground storage for crude oil and products 4 docks with deep water draft accommodating fully laden VLGC’s

Ample utilities available for power, air, steam, flare, fuel and water

systems for development of Olefin and Polyolefin processing. Rail receipts for Butane, Propane and Natural Gasoline = 30MBbl./day - Additional rail on premises for olefins and polyolefin outbound - Room to build significant additional rail capacity Truck inbound/ outbound

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Page 10: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

Marcus Hook Terminal Build-Out

Page 11: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

Marcus Hook Industrial Complex

Mariner Infrastructure

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Page 12: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

Marcus Hook Docks

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4 Ship Docks VLGC Capable

2A-Ethane 3B

3A-Propane Butane

1A- Ethane Propane Butane

3C-Propane Butane

Page 13: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

Port of Houston

Port of Philadelphia

Channel project width 400 feet (122m) 800 feet (244m) General Port Traffic (ships and tugs)

163,866 4,440

Vessel delays (hours) 685 hours 0 Fog Delays (hours) 385 hours 0 Channel Closures (hours) 595 hours 0 Hurricane events Days of closure, up to

6 days wait for direct hits

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Houston Ship Channel v. Port of Philadelphia

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Page 14: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

SXL Delaware River Expertise

Managed 800+MBPD of marine feedstock

Thousands of marine

movements yearly Excellent Coast Guard and

Pilots relationship Area refineries dependent

upon marine supplied feedstock

Knowledge and experience

with marine LPG movements

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Marcus Hook

Page 15: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

Projected Shipping Rates (¢/Gal)

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Semi Ref VLGC Destination (140 MBBLS) (550 MBBLS) Europe 10.5 4.3 Far East NA 13.5

Key Points Widening of Panama Canal in 2016 Overbuilding of VLGCs Ability to load split cargos will be competitive advantage

Page 16: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

793 KMTA PP

370 KMTA PP

1,148 KMTA PP

2300 KMTA PP Market within 600 miles

Page 17: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

Mariner East NGL Economic Advantages Distance from Marcellus / Utica – pipeline cost

Very competitive export cost vs. USGC alternative

No vessel delays due to port congestion and minimal weather delays.

World class export operation with 5 MM Bbls, storage, redundant refrigeration and dock capacity capable of loading VLGC’s at 25,000 Bbl./Hr. Access to obtain the international arbitrage

– Arb expected to widen as crude price increases and naphtha becomes more expensive relative to NGL’s.

Access to distribution for propane and butane in the premium NE

fuels markets (BTU’s & gasoline blending). 17

Page 18: Sunoco Logistics Mariner Systems & Marcus Hook Industrial ... · Logistics Partners L.P. has included in its Annual Report on Form 10-K for the year ... Mariner East Overview $ 3

Marcus Hook Chemical Processing Advantages

More than an ideal NGL export location. MHIC provides utilities and operational expertise for manufacturing and distribution to local and regional markets for NGL’s, Olefins and Poly-Olefins.

300 miles from abundant, advantaged NGL supply and

proximate to large Northeast US polyolefin demand Manufacturing potential- PDH, BDH, Polyolefin production,

Alkylate. Experienced process operators. Ample rail car storage & switching and serviced by both

CSX and NS